BEIJING, 23 April (Reuters) – From robotaxis to flying cars, China is working to export more of its cutting-edge vehicle technology – a strategy that reflects both its global ambition and the harsh reality of the country’s economy.
The world’s second largest economy is home to the world’s largest and most advanced automobile market. But a multi-year price war has left the country with a surplus of vehicles, including electric ones mass-produced by companies unknown in the West.
Auto sales in China fell 18% in the first quarter from a year ago and are expected to remain flat or down for the foreseeable future.
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Foreign markets offer the promise of higher margins and significant growth in sales volume, analysts and industry observers say. That means the prospect of global growth will be the focus of China’s annual auto show, which kicks off on Friday in Beijing.
China’s exports already grew significantly last year, when the country exported 5.8 million cars, almost 20% more than the previous year, according to sector data.
China’s total vehicle exports, including cars and commercial vehicles, are expected to grow 4% to 7.4 million this year, according to a forecast from the China Association of Automobile Manufacturers released on Thursday.
“They’ve reached a point where they know it’s not just about China,” said Pedro Pacheco, an analyst at research firm Gartner, speaking about Chinese automakers.
‘They also need a roadmap for deploying technology in Europe, Latin America and Southeast Asia.’
Chinese electric vehicle brand Aito, which is backed by technology giant Huawei, is among those targeting growth abroad. Aito aims to more than double its annual sales to 1 million vehicles by 2030, its president John Zhang told Reuters.
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Zhang said Aito, owned by Chongqing-based automaker Seres Group, expects overseas sales to account for 20% of total volume in the next three years, compared with less than 1% currently.
The company plans to enter some northern European markets this year, where adoption of electric vehicles is higher.
For now, the US is effectively closed to Chinese cars.
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Chinese electric vehicles are also subject to tariffs in Europe but may still be competitive there, making European markets appear to be a focus for Chinese electric vehicle makers.
Increasingly, cars made in China meet the needs of foreign drivers, analysts say.
‘China is not an emerging country in the automotive sector. It’s a cutting-edge, high-level country,” Francois Roudier, secretary general of the International Organization of Motor Vehicle Manufacturers, a global industry group, told Reuters in Beijing.
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North American consumers have also become more interested in Chinese vehicles, according to surveys, although barriers to selling there include tariffs of about 100%.
Earlier this month, three United States Democratic senators asked US President Donald Trump to stop Chinese automakers from manufacturing vehicles in the US and to prevent Chinese cars assembled in Mexico or Canada from entering the country.
In January, Trump said he was open to Chinese automakers making vehicles in the US.
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He is expected to meet Chinese President Xi Jinping at a summit next month. The economic and trade relationship with China is stable and Trump will try to keep it that way, US Trade Representative Jamieson Greer said earlier this month.
